Reconciling Bank/Credit Card Accounts

The Reconcile Bank Accounts feature helps match the account balance in PowerChurch Plus to the ending balance shown on the bank statement. These balances will most likely not match, due to the amount of time that passes between writing the check and when it actually clears the bank. Transactions that have not yet cleared are considered "outstanding".

The reconcile process is very simple. It may not appear so when you are trying to find that $7.82 difference between the PowerChurch account balance and your bank statement balance. But in reality, what the Reconcile Bank Accounts process is doing is simple addition and subtraction. There are no smoke and mirrors, just math!

As you clear checks and deposits in the reconciliation, you will see the balances and totals changing at the bottom of the screen. Here is an example of these fields and an explanation of the calculation that is actively occurring as you clear each transaction:

It starts with the "Bank statement balance" you entered, then subtracts outstanding checks, and adds outstanding deposits. The resulting total is the "Adjusted bank balance". That amount is then compared to the current "Account balance" in PowerChurch Plus. If the "To balance" amount is zero, then you have successfully reconciled with the bank statement.

If it does not balance to zero, then you will need to find the discrepancy. What steps you need to take will vary depending on your situation. A few different possibilities are listed below.

• Incorrect beginning balance. If this is the first month that you are reconciling in a new setup, then there is a good chance that the difference is because of an incorrect beginning balance on the account. If it's not the first month and you normally reconcile down to a zero difference, then you know that the problem has occurred since the last successful reconciliation.
• Missing or extra transaction. It is possible that there is an additional transaction in PowerChurch Plus that needs to be reconciled, or a missing transaction that needs to be entered. If a transaction is listed on your bank statement, but does not show in the list of transactions on the screen, make sure that the "Only show items dated before statement date" box is unchecked. This option was added in Version 11, by popular demand, and limits the transactions in the Checks and Deposits list by date. It could be that the transaction you are looking for is hidden because of a date conflict.
• Incorrect amount on transaction(s). Double check all of the amounts of the transactions that you have cleared in this month's reconciliation. Verify that the amounts match what show on the bank statement. It is not uncommon for a bank error to occur and a check or deposit to show up as a different amount than the actual amount of the transaction. In this case, you would need to contact the bank.
• Transaction incorrectly marked as cleared. It is possible that a transaction was incorrectly marked as cleared in a current or prior month's reconciliation. You can postpone your current reconciliation and go back into it, choosing to include All Data instead of only Unreconciled Transactions. This will show all transaction history for this account, including all prior months/years of cleared transactions.

If you have exhausted all resources and cannot find the difference, or if the problem goes so far back that you are unable to post corrections, then you may choose to create a balance adjustment transaction in Fund Accounting. Postpone the current reconciliation, then go to the Enter Transactions screen in Fund Accounting and create the transaction. It is important to document the reason for this adjustment in the notes section. It also may be necessary in your organization to have the balance adjustment approved before posting.

Once this adjusting entry is posted, you will find it in either the Deposits or Checks list in the Reconcile Bank Accounts screen. When you mark this transaction as cleared, the To Balance amount should drop to zero.

Entering a transaction to "force" the reconciliation process to balance should only need to be done once to correct an existing problem. If you find you are unable to balance the next month, most likely there are ongoing problems. At that point, the effort should be spent to find the actual source of the problem, rather than force the balance to be correct with an adjustment.